02627cam a22002537 4500001000600000003000500006005001700011008004100028100002200069245012800091260006600219490004100285500001900326520143400345530006101779538007201840538003601912690008501948690014902033710004202182830007602224856003702300856003602337w7560NBER20171213215624.0171213s2000 mau||||fs|||| 000 0 eng d1 aBrown, Jeffrey R.10aDifferential Mortality and the Value of Individual Account Retirement Annuitiesh[electronic resource] /cJeffrey R. Brown. aCambridge, Mass.bNational Bureau of Economic Researchc2000.1 aNBER working paper seriesvno. w7560 aFebruary 2000.3 aThis paper examines the extent of redistribution that would occur under various annuity and bequest options as part of an individual accounts retirement program. I first estimate mortality differentials by gender, race, ethnicity and level of education using the National Longitudinal Mortality Study and document substantial differences. I then use these estimates to examine the expected transfers' that would take place between socioeconomic groups under different assumptions about the structure of an annuity program. Using an expected present discounted value or money's worth' calculation as the basis for comparison, I find that the size of transfers in an individual accounts program is highly sensitive to the benefit structure. For example, mandating a single-life, real annuity can result in expected transfers of as high as 20% of the account balance, often from economically disadvantaged groups toward groups that are better off. These transfers can be substantially reduced through the use of joint life annuities, survivor provisions and bequest options. For example, the largest expected negative transfer under a joint and full survivor annuity with a fully valued 20-year guarantee option is only 2% of the account balance. However, efforts to reduce the extent of redistribution generally do so at the cost of significantly lower annuity benefits paid to the individuals who contribute to the system. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aH55 - Social Security and Public Pensions2Journal of Economic Literature class. 7aJ14 - Economics of the Elderly • Economics of the Handicapped • Non-Labor Market Discrimination2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w7560.4 uhttp://www.nber.org/papers/w756041uhttp://dx.doi.org/10.3386/w7560